Category Archives: Startup Team Building

How To Understand Customer Lifetime Value and Customer Acquisition Costs?

How To Understand Customer Lifetime Value and Customer Acquisition Costs?

The Key to Profitability for your business

Understanding customer lifetime value and customer acquisition costs.

It comes as no surprise that a company must earn more revenue over the lifetime of any given customer (referred to as Customer Lifetime Value or CLTV) than it costs to acquire the customer (referred to as Customer Acquisition Cost or CAC).

While there are additional overhead and operating expenses that affect profitability, the first step in building a profitable business is to implement a scalable business model where your Customer Acquisition Cost is lower than your Customer Lifetime Value.

In theory, this seems rather obvious. However, putting this concept into practice can be difficult as your CLTV and CAC aren’t always extremely apparent. Additionally, it takes seasoned marketers and business leaders who understand how retention rates, sales & marketing channels, and business models affect

CLTV and CAC.

In this blog I’ll be discussing the factors that affect CLTV and CAC as well as strategies for increasing CLTV and reducing CAC. While much of what’s presented below is generally true across most industries, there are certainly caveats for every industry and business model.

Customer Lifetime Value

Before we discuss strategies for increasing CLTV, let’s wrap our heads around what CLTV is and how it is calculated. In its simplest form, CLTV is a prediction of the net profit attributed to the entire future relationship with a customer. CLTV is calculated by forecasting the average customer lifetime (the number of months the customer purchases your product), the average monthly spend of your customers, and the average monthly cost of distributing your products.

As a result, you can increase your CLTV by:

1) increasing the average monthly spend
2) increasing the average customer lifetime
3) decreasing the cost of distributing your product.

Increasing Average Monthly Spend Per Customer

The most immediate way to increase your average monthly spend is to increase your price. However, an increase in price will often lead to either a reduction in conversion rates (the number of total customers) or a reduction in retention rates (the number of repeat purchases from a given customer).

You don’t want to increase your average monthly spend only to decrease the total number of customers or the average customer lifetime.

You can also increase the average monthly spend through upselling and cross-selling techniques. Think of Amazon suggesting additional products and services bought by other customers looking at the same item. Additionally, you can implement increase average monthly spend by implementing loyalty programs, improving conversion rates through website optimization, and streamlining the sales process.

Increasing Average Customer Lifetime

CLTV can also be increased by improving retention rates, or the percentage of customers that remain customers over time. Companies with low retention rates are required to draw the majority of their profits from just one purchase per customer while companies with high retention rates benefit from spreading their CLTV over numerous purchases.

Retention rates can be increased by improving customer satisfaction through strategies such as customer service and support centers, sending periodic discounts and promotions, offering loyalty programs, and enhancing the overall customer experience.

Decreasing the Cost of Distribution and Fulfillment

Every business’ cost structure will vary but some of the more common ways to decrease the cost of distribution and fulfillment include: purchasing inventory in larger amounts, utilizing cheaper vendors and suppliers, substituting lower cost materials, decreasing base salaries and increasing commissions, utilizing independent reps over in-house reps, and reducing waste.

Customer Acquisition Cost

Developing a business model that results in a low CAC and that is scalable is difficult and where many startup businesses fail. In a world of data overload, it is challenging to attract and successfully sell products and services to people that have never heard of you. Every product and service is different, but for most companies the customer goes through several stages before making a purchase.

First, they have to become aware of your product or service through PR, advertisements, word of mouth, social media, reviews and blogs, etc. Next, they often need to be courted by sales reps and go through some sort of on boarding process.

This process from start to finish can be costly. Naturally, you have options as to how you allocate your marketing and customer acquisition dollars. Strategies such as SEO are typically low cost but usually don’t offer a strong degree of control, targeting, and results. Unlike strategies such as direct sales which are typically very costly but come with a strong degree of control, targeting, and results.

It is important for businesses to research standards in their industry and then benchmark themselves against those standards in order to pick the appropriate channel mix for their business. Additionally, companies can get creative with low cost channels that will help to reduce the average CAC across all channels.

For example, referral and word of mouth programs (such as business that offer one month free for every 10 friends referred) are a great way to acquire new customers at very low costs. While you cannot rely on these strategies exclusively, they will help reduce the average CAC across all strategies.

Optimizing the CAC and CLTV ratio is crucial to the success of any business. The earlier the business can figure out the right mix the sooner they can begin scaling in a profitable way.

Here at The Startup Garage, we help entrepreneurs devise the appropriate business models and sales and marketing strategies that will enable them to scale a profitable business. Contact us to learn more.

Ready to win over $10,000 in Prizes for your Brilliant Business Idea?

Ready to win over $10,000 in Prizes for your Brilliant Business Idea?

The Startup Garage is excited to co-sponsor in “The Ideator December Challenge.”
A challenge designed to bring your business idea into conception.

Submissions currently open now until Dec 13, 2015 at 5pm (PST) entering is easy and done completely virtually.

Enter here today >>>December Challenge Idea Competition

The winner will be walking with $10,00 plus advisor board access, key mentorships, investor relationships, and specialized tools and resources from challenge sponsors:

SalesForce.Org
box.Org
Google
Pledge 1%
Crunchbase
Nasdaq Entrepreneurial Center
BandofAngels
LegalZoom
Perkinscoie
Listhunt
SplashU

All ideas at any stage are welcome, this challenge is designed to bring your idea to life!
Judges are looking for the biggest idea with the best-defined roadmap to success.

The Top 5 idea will be notified on December 14th and selected to pitch in the finals on December 15th at 5pm PST.

5 questions to answer when entering to optimize your pitch are:

How big of a problem does the product solve?
How well does the product solve the problem?
How well do the docs, if any, support the idea?
How has collaboration helped the idea?
Do the goals and tasks adequately outline a roadmap to success?

Remember to structure your pitch in a colorful story with a beginning, middle, and end.
Let your personality shine through without being too salesy, vague, or abstract.

Ideator was created to foster global innovation and entrepreneurship, while also making them easier.
The Startup Garage Team, know’s it’s ideas like yours that continue to shift the landscape of business innovation.

We look forward to hearing your ideas and helping launch them to the world!

Tweets. Hearts & Pivots: 5 Startup Business Lessons To Learn From Twitter

5 Startup Business Lessons To Learn From Twitter from The Startup Garage

Tweets. Hearts & Pivots: 5 Startup Business Lessons To Learn From Twitter

As Twitter shares plunge 13% and user growth & revenue pale in comparison to other social networks.

Investors, shareholders, and tweeters alike fear the legendary tech startup is doomed. #TwitterTurmoil

Founded in 2006 by by turning “moments of panic into moments of inspiration”
Twitter is no stranger to the art of the pivot and is taking fast deliberate actionable steps to ensure a successful future.

5 Key Business Lessons To Learn From Twitter

1. Embrace change.


“Expect the unexpected. And whenever possible, be the unexpected.”

Jack Dorsey 
knows when it’s time to hold to true to traditional strategy, and when it’s time to evolve. Twitter doesn’t fear change it leverages it as a discovery tool. Actively re-evaluating what’s working, what may have been overlooked, and to re-imagine what’s possible.

2. Value Consumer Habits.


A product only as valuable as the the User Experience. 
Over 300 million people use Twitter on a monthly basis, however over a billion people have tried Twitter and decided it’s not for them.

Recognizing there’s the potential to appeal to an additional 700million people, Twitter continues to simplify the platform to enhance the user experiences.

Twitter closely studies their customers’ broader behaviors around the use of their products and services.

Here are examples of careful listening and watching:

  • More Visual Pizzaz – Twitter Feed Looks More Like Your Facebook Feed

  • While you were away feature– Recap of tweets you may have missed that have high user engagement
  • Moments– lets users quickly find the best of what’s happening on Twitter at any given time.

  • Hearts replaces Stars– “The heart is a universal symbol that resonates across languages, cultures, and time zones. It is more expressive, enabling you to convey a range of emotions and easily connect with people. And in our tests, we found that people loved it.”
  • Polls -people can weigh in on all the topics they care about.
  • Unlock 140 Characters– still undetermined, there are talks of Twitter tweaking it’s character limitation limit beyond 140 characters.


3. Leverage Multiple Product Streams.


Twitter doesn’t rely on one product stream, like most successful Startups, their business model includes and integrates a variety of products/platforms.

Apps like Vine and Periscope are social media moguls individually, however their integration with in Twitter is the startup “Secret Sauce” and perhaps the most crucial ingredient to growth.

4. Never Stop Focusing on Funding.


1.16 Billion dollars in 8 funding rounds later Twitter, knows that seeking and raising capital is a constant battle. There’s not a mysterious funding plateau a startup reaches where investors and investments no longer matter, even for Unicorns.

There’s always a song and dance for funding, with investors scrupulously looking for the highest potential return on investment, with little risk.





5. Choose a CEO that is both a leader and a visionary.

Twitter announced that it was bringing back its co-founder, Jack Dorsey, as permanent CEO. Jack is a lead product visionary at the core, and aims for his products to help society work more efficiently and humanely.

“My role as an observer and as a technologist is to show everything that’s happening in the world in real time and get us to that data immediately, so we can change our lives even faster, with better knowledge.”


People invest in people, a good leader is someone who guides people and empowers it’s members to make big decisions. If I have to make a decision,” Jack says, “we have an organizational failure.”

Whether or not the 5 business lessons above will save Twitter, only time will tell.
It’s a critical time in the history for one of the most mainstream media platforms of our time.


Twitter was born out of a Pivot in 2006 …will it Thrive on a Pivot in 2015?

Tech Focused ‘Super Schools’ to Rethink High School Education in the U.S.

Tech Focused ‘Super Schools’ to Rethink High School Education in the U.S.

XQ: The Super School Project infused with $50Million Dollars of Steve Job’s fortune intends to redefine traditional U.S. high school education.

The team based competition encourages applicants to reimagine and modernize public education.
“To create the future, we must first imagine it.” 

The project intends to build and support 5-10 Super Schools to better fit an innovative-focused society, levering critical thinking and collaboration within the largely unchanged U.S. institution.

The Startup Garage Team spoke with 4 innovative educational leaders to share their keen insights and perspective regarding the XQ Project, and the future of entrepreneurship.

David Fu: An education community builder and the head of 4.0 Schools in NYC, an education incubator for early stage entrepreneurs launching innovative companies, nonprofits and schools.

Where does your passion education innovation draw from?

My passion for education innovation draws from two areas: first, this is a common refrain, but I am a first generation immigrant and it is clear to me how much I have benefited from opportunities I was afforded growing up in the U.S. as compared to in China. I believe firmly that we cannot know everyone’s potential without affording them similar opportunities, and I believe education is one of the best ways to do so. Second, I believe education is far from that ideal state, and that we must find innovative ideas that can help bridge from the current state of the world.

What you’re overall perspective of the XQ: The Super School Project?

I am excited because I think this project draws attention and brings funding to an area in need of innovation, in education the current school model (and high school model, in particular). I like the parallel between the overall process (team, discover, design, develop) and lean startup or design thinking; I also love the focus on users (students in the 21st century) in the discover phase and the focus on student agency & engagement in the design phase. I think this is a key mindset shift that still needs to take place in education across the country: how might we enable students to own their own learning? (and how do we then measure that learning; I do not believe standardized testing helps achieve this goal)

Two potential concerns:
First, are they partnering with local organizations to build the pipeline of talent and then screen it? The large marketing campaign and names (and roadshow / local events) should surface a lot of amazing people and ideas, but how do they plan to sift through them all and identify both great ideas and the right people to bring them to life (and right location with the right environment to do so)? There is some concern in the press around these ideas / process being too local, but I’m worried it’s not local enough.

Second, I’ve seen the value in making small bets and testing core components of a school model before opening the doors to the school (tiny schools) — I’m worried that this is potentially a large bet made too early. I hope that they plan to incorporate testing and many cycles of discovery, design, development to iterate on and launch truly innovative high school models.

How do you feel high school students today could be better prepared for Entrepreneurship?

I feel that one big challenge in school is that there is no culture of risk-taking and failure (either for students or teachers). There is such an emphasis on results (academic, grades, getting to college; test scores and value add) and concepts like leadership and service, but not enough emphasis on valuing the process itself.

For example, let’s say a project was to build a rube goldberg machine to put bread in a toaster and set it to to toast the bread with the constraints being a certain time frame and certain materials.

If a failure to accomplish this goal by your rube goldberg machine results in a low grade automatically, then the incentives are to take as few risks as possible and make sure that what you do works. Instead, grading based on the process and reflection on what students learned in project-based learning would enable this shift.

What advise would you give to give to a high school student interested in becoming a Startup founder?

First, most technology startup founders that are successful either have deep technical expertise – coding, web/app/software development, engineering OR deep industry experience / passion — understand the problems faced by consumers or businesses in a particular industry like education, healthcare, etc. Second, find something you are really passionate about, and become a problem hunter to understand the challenges people face in that area/field/industry — it takes passion for you to stick to it through the tough times you will face as an entrepreneur, and it takes a deep understanding of a problem first to come up with a great solution.

Regina Bernal: Entrepreneurship and Experiential Learning Coordinator a the University of San Diego, empowering entrepreneurs to turn their venture ideas into a reality.

Are you familiar with the XQ: The Super School Project? What is your overall perspective of the concept?

I am extremely impressed with this concept, I would have loved be part of a more more innovative high school experience

How do you feel high school students today could be better prepared for college?

High School students need to “Get out of the Building” learn more in the world, not just in the classroom. There is so much learning that comes from interactions, experiences, and situations. The more that high school teachers are able to tie in real world situations to their curriculum the better prepared students will be when they come to college. There is not a perfect handbook to help guide your way through college, but knowing how to tackle difficult situations in creatives and innovative ways would be a game changer for a future college student.

What are 3 elements of the USD entrepreneurship program do you feel could be beneficial to high school education?

Know your pitch! Learn how to effectively communicate your ideas, and get the buy-ins from those around you. At USD we are heavily focused on the “pitch”. A great idea can be lost in the inability to effectively communicate it, Get out there and actually test your ideas! You may think you have the best ideas in the world, but unless other people agree and get excited about it then you eventually hit a wall Grow your network! Even at a High School level, you need to think about those around you and how they can help build on your ideas.

Entrepreneurship and life is about collaboration, knowing great people that you can reach out will be an advantage in anything that you decide to do.

What advise would you give to give to a high school student interested in becoming a Startup founder?

It is never too late to start! There are no rules to being an entrepreneur and everyone has a different path. If you have the slightest inspiration or inclination to be a Founder get out there and start testing your idea. Do not be too in love with your original idea and be flexible to change

Shana Tessenholtz: Assistant Principal of English/ELL for a large comprehensive high school in Queens NY grades 9-12.

Are you familiar with the XQ: The Super School Project? What is your overall perspective of the concept?

Not familiar. I think I saw a sign for it at a bus stop but don’t really know what it is.

How do you feel high school students needs today differ from when you were a high school student?

The world is a very different place from when we were high school students. Teachers need to infuse more technology into their classrooms as students use technology every day of their lives. Also, the attention span of students today is much shorter. Teachers constantly need to mix things up to keep students interested. There is also much less accountability for students then there was when we went to school. If students are not doing their work, parents say “you are not challenging my kids, you don’t like my kid….” Also, deadlines are often guidelines instead of hard and fast due dates.

What are 3 elements you would implement to better prepare students for college, jobs, and life after high school?

To prepare students for life after high school: more internships, students MUST learn another language (Chinese is a good pick – not just Spanish or French anymore), financial awareness (students have no concepts of how much money is costs to go to College and to live in the real world)

What advise would you give to give to a high school student interested in becoming a Tech Startup Founder?

There are a lot of great internships and programs available for students who are interested in this field. I think the #1 piece of advice would be to get an internship and immerse themselves in the field. Talk to people who are already in the field and doing what they want to do and find out what it takes. How much money will they need? Business plan? Who will they talk to when their product is complete? Having an idea is simply not enough anymore in this competitive market.

Deborah Chang: Education Entrepreneur and Community Organizer, building scaleable solutions that take down systemic barriers to education innovation.

Are you familiar with the XQ: The Super School Project?What is your overall perspective of the concept?

In this era of high-stakes end of the year tests being used to label schools and evaluate teachers, educators, particularly those teaching the most disadvantaged students, are feeling the pressure to teach in ways that may not encourage student creativity, empowerment, and collaboration. In addition, teaching that is projects-based, hands-on, real-world is hard. We need to provide real support as a nation in the form of training, community building, and finances in order to truly transform education.

What XQ: The Super School Project does is provide the political cover and resources necessary for educators to create schools that truly meet the needs of their particular community of students. Perhaps even more importantly, it is catalyzing conversations around the country on what education really needs to look like, sound like, and feel like In a connected world. It is these ongoing conversations leading to real action by committed teams of people that will ultimately lead to positive collective impact for our nation’s children.

How do you feel high school students today could be better prepared for Entrepreneurship?

65% of our students will be working in jobs that have not been created yet (Source: US Labor Report). So, let’s not pretend to know what kind of world our students will inherit. Instead, let’s teach our students to create the world that they want to live in.

What advise would you give to give to a high school student interested in becoming a Startup founder?

Learn how to learn. Learn obsessively. Learn quickly. As you’re figuring out your life’s purpose, don’t sit in a room and stress. Just throw yourself into projects over and over again to learn more about yourself while building skills that will make you invaluable. Quit projects if you need to in order to have the freedom to discover what you truly love, what you’re good at, what the world needs, and what’s financially sustainable. And, have the courage to quit because you trust in your ability to learn, no matter what life throws at you.

Finally, commit. As long as you commit to uncovering that purpose you’ll forever
live your life by, you’ll find it, and when you do, even if it looks different from anything else that has ever been done before, your life will have completely changed for the better.

Ready to #RethinkHighschool?  Applications are being accepted until November 15th Enter Today here> Project XQ

6 Reasons You’ll Want To Attend The USD Legacy Entrepreneurship Conference

USD Legacy Entrepreneurship Conference From The Startup Garage

6 Reasons You’ll Want To Attend The USD Legacy Entrepreneurship Conference

On Thursday Oct 8 2015 The University of San Diego School of Business Administration and the Center for Peace and Commerce proudly present the 3rd annual USD Legacy Entrepreneurship Conference.

If you find yourself sitting on the fence, debating whether or not you should attend this premier networking and coaching opportunity for entrepreneurs…

Here are The Startup Garage Team’s Top 6 Reasons Attending is a MUST.

1. The Financial Times recently ranked USD’s School of Business Administration’s MBA Program Number Three in the World for Entrepreneurship. An honor that undeniably showcases USD entrepreneurship know how.

The esteemed ranking is based on criteria included the percentage of graduates who created their own company, the percentage of companies still operating at the end of 2014, whether it was their main source of income and how the school and the alumni network helped set things up.

2. USD Entrepreneurship’s purpose is to empower change makers through entrepreneurship.

The event was purposefully created to evolve and sustain a community of aspiring as well as seasoned entrepreneurs/business owners. Ultimately, bringing together students, alumni, investors and entrepreneurs for an interactive evening of coaching and collaboration.

3. Anyone can benefit from attending the conference.
“The USD Legacy Entrepreneurship Conference is one of our biggest events at USD for Entrepreneurs.It is incredible opportunity for anyone who has ever had an inspiration to be an entrepreneur to get the “real” behind the scenes story from some of San Diego’s top Entrepreneurs.

Participants will network with people who have done it before and can share their stories of “If I started my venture today, how would I do it differently” and “What I would tell my 21 year old self”. Making mistakes as an entrepreneur can be very expensive, and an event like ULEC gives people the opportunity to ask questions, get feedback, and gathered some lessons learned from top entrepreneurs.

It is also a great opportunity to meet our current innovative students and the thriving USD startup community. social entrepreneurs who are changing the world and want to share their stories will also be on the panels adding a “changemaker” perspective” Regina Bernal, Entrepreneurship and Experiential Learning

4. There is no cost to attend. It’s a completely FREE event, although space is limited.


*HINT sign up early to reserve your seat.*
When was the last time you got to network in a beautiful setting with highly successful individuals ready and willing to share with you their knowledge and insights at no cost?

5. Conference panelist include a blend of unique entrepreneurs, each with their own story and journey to share.

USD Current Student Entrepreneurs include:

 Nathan Resnick ’16 BA, founder of Yes Man Watches and Corked

USD Alumni Entrepreneurs Include;
 Alex Pascal ’07 BA, co-founder and CEO of CoachLogix

 Cody Nenadal ’08 BA, vice president of Silicon Valley Bank

 Lynn Hijar ’98 BA, ’06 MSGL, founder and CEO of iBz247

 Siyamak Khorrami ’06 BS, president of Skyriker IT

 Teresa Smith ’13 MA, CEO of Dreams for Change

Guest Entrepreneurs include:
 Silvia Mah, founder and CEO of Hera Labs

 Phil Blair, president and CEO of Manpower

 Sneha Jayaprakash, CEO of Giventure

 Ned McMahon, CEO of Primo Win

6. At the conclusion of the event you’ll leave with actionable deliverable information and results in order to turn big ideas into reality.

You’ll leave with 3.5 hours of solid startup advice, tried and tested by successful entrepreneurs.
Plus you’ll have a newfound community of entrepreneurs you can easily connect with online and offline #USDENTREPRENEUR for further discussions.

Now that you’ve decided to join us be sure to say hello to The Startup Garage Team!

Tickets can be reserved here>> USD Legacy Entrepreneurship Conference

How To Optimize Your Board of Advisors

How To Optimize Your Board of Advisors

Every company – from high-growth startups to slow-growth enterprises – can benefit from an advisory board if it is well-structured and well-managed.

Some of the obvious benefits of an advisory board include credibility for you and the company, domain expertise, and/or a well-established professional network.

This blog post will provide guidance for assembling a well-structured advisory board as well as management tips for extracting the most value from your advisors.

Assembling Your Advisory Board

Step 1: Determine Your Needs

Start by looking at the most important functions of your particular business, it may be technology, sales, marketing, financial management, daily operations, etc. Next, look at your and your current team’s expertise and core competencies to identify weaknesses and gaps.

These gaps and weak areas are a good place to start in terms of identifying the types of advisors that would be able to add the most value. Be honest with potential advisors about your strengths and weaknesses and how you are hoping they can help.

Next, get very clear on your short term and long term goals. Do you need investor introductions? Or perhaps you are looking to partner with a major player in your industry? Understanding your goals can help you better understand the type of advisor needed for your board.

Step 2: Determine Compensation and Level of Involvement

Most good advisors, depending on your relationship with them, will likely expect something in return for their time, network, and knowledge. While you can certainly compensate your advisors monetarily, the most common method of compensation is providing a minor percentage of equity (anywhere from less than 1% up to 2% or more).

Some advisors will be willing to commit more of their time, connections, and expertise than others. Before approaching potential advisors, determine levels of involvement with distinct compensation packages for each and present them with options.

Step 3: Passion Is a Must

In order for any advisor relationship to be successful it is important that they are not only capable of providing expertise but they are passionate about you and your company. Without passion their expertise will more than likely fall flat.

Extracting Value from Your Advisory Board

Step 1: Information is King

Your advisors are likely very busy people and you want to respect their time. However, in order for them to be effective advisors they need to be informed on the topics that you are seeking to cover.

Provide them with regular, scheduled newsletter style updates that are uniform, easy to digest, and highly informative. Be sure to set agendas for each meeting with a clear list of action items that you’d like to cover.

Submit the agenda a few weeks prior to the meeting with relevant information so that your advisors have time to prepare. During your meeting be sure to stick to the agenda and keep the conversations on task.

Step 2: Keep Your Ears and Mind Open

Your advisory board was not setup so that you could have a room full of heads nodding up and
down in agreement. The purpose of the advisory board is to offer alternative ways of thinking that you may have yet to consider. Set aside any presumptions you may have and sincerely consider everything thrown on the table.

While you should certainly ask questions and challenge ideas, you don’t want to waste everyone’s time (including your own) by not considering alternative viewpoints.

Step 3: Stay In Touch and Follow Up

Be sure to follow through on any action items that you and your advisors come up with during your meetings. This is not only a sign of respect but seeing that you are taking their insight seriously will encourage your advisors to remain engaged.

Lastly, be sure to follow up with your execution of action items along with any key findings or results. This information can be included as a part of your regular, scheduled newsletter updates discussed above.

If you have a question about your Startup business idea or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Furry Innovation: Pets Are Startup Businesses New Best Friends

Furry Innovation: Pets Are Startup Businesses New Best Friends

It’s no denying it, we love our pets and we’re willing to spend countless amounts of money in order to enhance their health, happiness, and even appearance.

According to the American Pet Products Association an estimated $58.5 billion was spent on pets in 2014. With nearly $330 million on pet costumes for Halloween alone.

From OnDemand Pet Adoptions to “Furspray” the newest way to decorate your pet for special occasions, Pet Startups combine the love of animals with a high-growth business opportunity. However, along with business opportunities comes fierce competition.

Currently listed on Angel List, there are 490 Pet Startups with an average valuation of $3.7 million across a pool 1,012 Investors. Leading the pack and setting the investment stage are DogVacay and Bark&Co.

DogVacay offers an on demand approach to petsitting near home, having securing 4 healthy funding infusions since 2012. Including: $1 million dollar seed round in May 2012, $6 million Series A round in Nov. 2012, $15 million dollar Series B round in Oct. 2013, and $25 million in Oct 2014.

Bark & Co. leveraged an untapped business model of a monthly subscription box of dog goodies with BarkBox and continued to expand across several other major properties:

BarkPost: Your daily dose of doggy news
BarkShop: Spoil your pup with the very best
BarkBuddy: Find fluffy adoptable singles in your area
BarkLive: Amazing experiences for you and your dog

Also securing a steady funding infusion including: $25,000 in Jan 2012, $1.7million in July 2012, $5million Series A round in April 2013, and $15million Series B Round in July 2014.

Funding is so red hot for Pets Startups, if the U.S. pet products industry collectively was a Fortune 500 company, it would be bigger than Google, Dell, UPS, or Coca-Cola.

Meanwhile, like any high-growth industry, it’s attracting a new breed of startup entrepreneurs with furry ambitions.

Here are a few “underdogs” that captured our attention here at The Startup Up Garage.

XcDogs: Based out of Jackson Hole, Wyoming, and it connects people who travel with their pets to locals willing to pet-sit short-term who is actively seeking funding at this time.

CleverPet: a local San Diego Startup which with a “Smart” pet gadget that educates and interacts with your animal companion in your absence. CleverPet had a successfully funded Kickstarter campaign of $180,623 and appears to have a variety of undisclosed funding in Sept 2015.

Urban Leash: offers on demand dog walking and cat-sitting services from anywhere at anytime, who a secured a $99,500 seed round in Nov 2014.

AllPaws is OkCupid for Finding Pets to Adopt, Swiping left and right and sifting through profiles is a regular practice for people looking for love nowadays.

Through the website and app AllPaws, the same approach is being used for those looking for a four-legged soulmate. AllPaws raised $1 million in capital in April 2013.

Will the Pet Startups above disrupt the pet industry as we know it?
Only time will tell, if they’re barking up the right tree.

If you have a question about your Startup business idea or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How To Identify a Startup Co-Founder

Identifying a Startup Co-Founder from The Startup Garage

How To Identify a Startup Co-Founder

It is all too common that a business savvy entrepreneur comes up with a good idea but cannot build the product.

Conversely, there are many tech founders that lack the business and interpersonal skills
necessary to take the product to market, develop partnerships, and liaise with potential investors.

Many founders of early stage startups struggle with assembling a well rounded founding team as they don’t know how or where to find the right co-founder.

This blog post is intended to help such entrepreneurs through the process of identifying the right co-founder for their business.

What: Hire Someone With Complementary Skills

While this seems obvious in theory it is a common mistake made by many first time entrepreneurs. It is our human nature to gravitate towards people that have similar skills, personalities, and approaches as ourselves. However, this defense mechanism does not overlap with identifying a good co-founder.

Clearly, you need to be able to work well with your co-founder, but you also need to challenge each other’s ideas and ways of thinking, not to mention balance each other’s shortcomings. Start by identifying the job description or the scope of your needs. What are the major gaps in your skill sets?

What departmental roles are currently underserved or would add the most value to your business?

Who: Hire Someone That is Sufficiently Qualified

Now that you’ve identified ‘what’ you need you’ll want to begin thinking about ‘who’ would be the right person to fill this roll. Start by asking yourself a few simple questions. What are the skill sets and expertise required to execute this roll? What are the attributes that would help attract potential investors (i.e. experience growing early-stage startups, direct industry knowledge, credibility and track record, passion and dedication, and personality fit)?

What is the pay structure that will entice this person (i.e. salary, equity, a combination of the two)?

Where: Start With Your Network

Lastly, now that you know what and who you need, we just have to figure out ‘where’ to find this person. The best place to begin is your own personal network. Start by identifying any people you may know personally that fits the ‘what’ and ‘who’ criteria that you’ve come up with. If this falls short, identify people in your network you trust that may have access to candidates whom fit your criteria.

Clearly describe ‘what’ and ‘who’ you are looking for and ask for warm introductions. If your network or extended network does not pan out there are several websites and events intended to help startup co-founders meet one-another.

These sites include TechCofounder, Founder2Be, FounderDating, and CofoundersLab. LinkedIn can also be an excellent resource for identifying potential co-founders.

Finally, you can also work with recruiters that specialize in your industry or that do startup placement; however, these services are not for free.

Prepare Your Terms

It is important that you draft up a Founder’s Agreement that outlines the terms of your partnership with a potential co-founder. While you will certainly want to remain flexible and open to negotiating these terms, it is helpful to come to the table with some basic ideas surrounding roles and responsibilities, pay structure, ownership splits, vesting schedules, etc.

This not only shows the candidate you are serious but it also gives him/her the information needed to take the conversation from pitching the opportunity to negotiating the terms.

If you have a question about your Startup business idea or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

The 12 Best Startup Accounts To Follow On Twitter

The 12 Best Startup Accounts To Follow On Twitter

The Startup Garage team scoured Tweeter to bring you 12 diverse Startup resources full of rich content, active engagement, and follower traction worth following.

1.Funders and Founders@FundersFounders 19.7k followers

Are you a visual learner? @FundersFounders easily explains Startup Entrepreneurship visually through simple, fun, informative infographics that will help you thrive as an Entrepreneur.

2. Tech Cocktail @TechCocktail
51.9k followers

An online hub that brings the tech & startup ecosystems together on and offline.
Covering Startup news, how to’s, and upcoming events.

3. CB Insights @CBinsights
12k followers

A Venture Capital Database with detailed research reports, that helps track the world’s most promising private companies, their investors, acquires and the industries they compete. 
Helping entrepreneurs make smarter, faster, wiser business decisions.

4.Seed Sumo @SeedSumo
5,300k followers

A Superhuman Startup accelerator based out of Texas. @SeedSumo delivers a wide variety of worthy tweets, trends, and mentorship.

5. Startup Digest @StartupDigest
66.7k followers

Locally grown fresh Startup events in your area and around the world sent directly to your inbox. Designed to keep you in the Startup know.

6. Mashable – Startups @mashstartups
100k followers

Digital Culture news at your fingertips. An essential Startup resource for inspiration and fun, curated by a staff of rad contributors, who have set out to empower others.

7. 500 Startups @500Startups
354k followers

“Meet our badass, global family of startup founders, mentors, and investors” need I say more.
This startup accelerated was founded by Paypal and Google alums and lives and breaths Silicon Valley.

8.Derek Andersen @DerekjAndersen
13.3k followers

The founder of @StartupGrind (another resource to take notice of) As he grinds and hustles through the Startup community. *SideNote: He recently turned up his Instagram game introducing StartupGrinder, for a “behind the scenes” perspective.

9. Forbes Woman @ForbesWoman 294k followers

Success Tools and Tweets for today’s ambitiously entrepreneurial women. Tweeting through the lens of the world’s most interesting woman.

10. Startup Quote @startupquote 34.7k followers

Well you guessed it… Quotes that only an entrepreneur would love & other innovative wisdom to ponder. *Side Note at the time of writing this article @Startupquote has been on Twitter hiatus since May 18th 2014. Technically bouncing them off our list, but still worth referencing in times of need.

11. AlleyWatch @AlleyWatch
10.9k followers

A platformed designed to foster the Startup community. Providing invaluable information for every state of the Startup lifecycle, from the dreamer to the serial entrepreneur.

12. Product Hunt @ProductHunt 85.6k followers

Products that are set to disrupt the market in some shape or fashion. Be warned browsing these tweets may leave your brain swirling in a sea of ideas and innovation.

Be sure to check out “28 Essential Hashtags To Use For Your Startup Business”

The Importance of Bookkeeping for a Startup Business

The Importance of Bookkeeping for a Startup Business

Bookkeeping, by definition, is the process of recording a company’s financial transactions and history.

It is the first step in the broader accounting process which involves reporting and analyzing data to make business decisions.

Many entrepreneurs find that they are wearing too many hats as it is and they just
don’t have time to dedicate towards proper bookkeeping.

However, bookkeeping is crucial for any startup for several reasons:
First and foremost, it helps companies make better financial and management decisions. Proper bookkeeping can help you understanding the key financial benchmarks that determine whether your company is operating successfully or not. Bookkeeping also helps with managing cash flow and answering questions such as: who owes you money, who do you owe money to, when should you send an invoice, when are your bills due, etc.

Second, consistent bookkeeping will help minimize the headaches when it comes to preparing your annual taxes. If you can provide your accountant with a well maintained balance sheet, cash flow statement, and profit and loss statement he/she will be able to dedicate their time towards making sound tax decisions rather than fixing problems with the financial statements.

Third, sound books will help you with planning your business’ next steps. By understanding key benchmarks such as cost to acquire a new customer and cost of goods sold you can begin to make educated decision about the best way to grow your business.

Fourth, investors require solid books. The frequency of which you report financial records will be determined by you and your investors. In any case, the more automated and uniform your financial reporting systems are for reporting crucial financial information the happier your investors will be. It will show to them that you understand your cash flow needs and the business key performing indicators that will allow the business to scale.

Furthermore, when raising capital, sound records will instill confidence in your investor and significantly increase your likelihood of receiving a check.

Now that you are on-board with the important of bookkeeping for a startup, let’s look at 10 of the most common types of bookkeeping accounts for a startup or any business for that matter:

Cash:

This is your most basic account and it tells you exactly how much cash you have in your
bank. Many businesses will monitor their cash account by separating cash receipts and cash
disbursements.

Accounts Receivable:

Not all companies will have accounts receivables. Receivables represent
money that is due from customers and is therefore only applicable to companies that sell
products or services prior to collecting payment or a portion of the payment upon the time of
sale. Tracking receivables will help you understand cash flow and keeping a detailed list of your various receivable accounts will help you stay on top of billing and invoices.

Sales:

The sales account is closely tied to cash and accounts payable but provides slightly
different insight. Sales is where you track anticipated incoming revenues from what you sell.
Tracking sales accurately will help you understand whether your business is on track to meet
predetermined metrics and benchmarks.

Accounts Payable:

Similar to accounts receivable, accounts payable represent money that you
owe to your suppliers and vendors for products and services that you did not pay for entirely
upfront. Tracking your payables will help you with managing cash flow, ensuring that you don’t
pay your bills twice, and may even make you eligible for discounts if you are able to pay early.

Inventory:

While inventory is not equivalent to cash or accounts payable it is certainly an asset on your balance sheet that needs to be carefully accounted for and tracked. Properly managing your inventory will help with understanding cash flow and anticipated production runs.

Loans Payable:

You loans payable account tracks the amount of capital that you’ve borrowed, how much you still owe, and how much is due in the next billing cycle.

Purchases or Cost of Goods Sold:

This account helps you understand the cost of delivering your product and service and when subtracted from your Sales account you end up with gross profit.

Payroll:

Payroll is the biggest expense for most businesses and should be monitored closely. Maintaining an accurate payroll account will pay dividends when it comes to tax and
government reporting requirements not to mention understanding your personnel expenses.

Retained Earnings:

Retained earnings are simply profits that are not paid out to owners or shareholders. Retained earnings are cumulative, or a running total, and demonstrate the profits that are reinvested back into the business.

Owner’s Equity:

This account simply tracks the capital investment that the owners’ have put into the business. This account is particularly pertinent if there are multiple owners who have put in disparate amounts of capital.

If you have a question about your Startup business idea or you’d like to discuss our Book Keeping Management Services, feel free to contact us for a free consultation!